For the first time, the Tokyo Stock Exchange suspended all trading early to prevent a system crash after a surge in transactions. Heavy trading followed news that an Internet company popular with investors is under investigation for fraud. The benchmark Nikkei index closed down about 465 points - nearly 3 percent for the day.

The Tokyo bourse ended all trading 20 minutes before the scheduled end of Wednesday's session.

At a news conference in the afternoon, the exchange said it had been swamped by sell orders for a second day and warned its computers could only handle 4.5 million orders each day.

Exchange officials asked for restraint by investors and brokers, calling the situation a potential emergency, but the announcement merely prompted an even greater spike in orders.

Nishimuro says the situation was caused by the start of the unexpected criminal probe into the Internet company, Livedoor, and its subsidiaries.

A three-day sell off has now evaporated some $300 billion worth of shareholder value. And exchange officials warn they may shorten trading hours in the days ahead if the unprecedented deluge of orders continues.

Livedoor was suspended from trading Wednesday morning because of the criminal investigation.

The company grew into Japan's most famous dot-com business through mergers and stock swaps and made its chairman, Takafumi Horie, a celebrity and - to many young people - a national hero.

The chairman of the Japan Securities Dealers Association, Hiroshi Hoshida, says the Livedoor founder now has a lot to answer for.

Hoshida says Livedoor should feel deeply responsible for damaging confidence at a time when Japanese investors were just beginning to move their money from savings to stocks.

Media reports Wednesday say the allegations the company is facing include falsifying earnings results and spreading false rumors to manipulate stock prices.

Toyota Chairman Hiroshi Okuda, who also heads Japan's most influential economic group, the Japan Business Federation, says if Horie or his company are found guilty of any crimes, they would be ousted from the association.

Okuda says the organization made a mistake by admitting Livedoor prematurely.

After the early close of Wednesday's trading session some analysts say selling pressure will continue, unless the exchange restores confidence by upgrading its computer system to handle a glut of orders. But others say many investors will realize the massive sell-off now offers a number of bargains.